Trump’s new Fed Governor Stephen Miran warns that not lowering rates more could threaten jobs.

New Federal Reserve Governor Warns on Job Market Risks

Stephen Milan, recently appointed by President Trump as a Federal Reserve Governor, voiced concerns on Monday regarding the central bank’s hesitation to implement further rate cuts, suggesting it could jeopardize the American job market.

Milan cast a vote for a hefty half-point cut just last week, shortly before leaving his role as Trump’s economic advisor. Notably, he was the only dissenting voice among 12 central bank votes, with 11 supporting standard cuts, including Federal Reserve Chairman Jerome Powell.

“My perspective on the appropriate monetary policy differs from that of the Federal Open Market Committees,” Milan remarked during his first public address at the New York Economics Club after his recent confirmation.

He elaborated, stating, “This current policy is overly restrictive and may significantly endanger the employment goals set by the Fed.” He also indicated that ideally, the funding rate should hover around 2% in the medium term, which would be nearly two percentage points below current levels.

The Senate narrowly confirmed Milan’s nomination by a vote of 48-47, with Senator Lisa Murkowski (R-Alaska) joining all Democrats in opposing Trump’s nominee for the central bank position.

Replacing former appointee Adriana Kugler, who resigned unexpectedly last month, Milan will serve the remainder of her term, which concludes on January 31, 2026.

Post-appointment, President Trump faced allegations regarding the improper listing of two properties in Atlanta and Michigan as his main residences in 2021. This surfaced following the dismissal of federal governor Lisa Cook and raised questions about potential mortgage fraud.

This summer, tensions flared again between the White House and Jerome Powell over a $2.5 billion renovation project of a downtown D.C. office.

Interestingly, Milan’s confirmation arrived just before the Fed’s anticipated interest rate cuts planned for mid-September, which may encompass broader adjustments.

Trump appears focused on reshaping the independent central bank with officials likely to favor rate reductions. However, a sense of reluctance regarding significant cuts remains among authorities, which could further affect loans and credit for average Americans.

Albert Musalem, President of the St. Louis Federal Reserve, remarked earlier on Monday that combating inflation is a crucial objective for central banks.

“I supported the 25 basis point reduction in the FOMC policy rate last week as a preventative measure aimed at bolstering the labor market against further weakening,” he noted during a statement at the Brookings Institution in D.C. “However, I think we have limited leeway for additional reductions without making overly aggressive adjustments, so we have to proceed with caution.”